Costly cars and weekly pizzas

Warning: They’ll screw up your retirement plans

LOS ANGELES (CBS.MW) – With a title like this one, I couldn’t help but add the book to my of personal finance library: “The Million Dollar Car and $250,000 Pizza.” Most personal finance books are heavy, dull catalogues of does’n’don’ts. Not this one.

The trick is to balance nest-egg building and the short-term pleasure and cost of that$20 weekly pizza.

Allyson Lewis, a professional financial adviser, lays out basic principles in a lively, keep-it-simple style loaded with lots of explanations, illustrations and essential details guaranteed to help you invest, save and make money.

The first part is one of the best step-by-step ‘how to create a financial plan’ on the market. She really understands the trick of balancing a long-term strategy for building your future retirement nest egg and the short-term pleasure and costs of that extra $20 pizza each week or an expensive luxury car.

This is the kind of book you need on the shelf, within easy reach. It works for beginners and experienced investors. I love books with lots of lists and structure. Easy to follow, to find and to use. Her 10 Myths, 10 Truths, and 5 Laws of Investing should be posted on every investor’s refrigerator, as daily reminders. Listen:

The 10 myths of investing

Myth #1. All investors are not equal. In fact, all investors are unequal. No cookie-cutter solutions. One size does not fit all. Like a recent ad says: “Rule #1: You are unlike all others. There is no Rule #2.” Believe it, you are totally unique. Challenge the norm.

Myth #2. Men and women want different things from money. Okay, so their styles are different. Still, the bottom line’s the same. We both want the same thing – financial security. Period.

Myth #4. Wait until the market is low before investing. No, no, a thousand times no! “It’s time in the market, not market timing.” You cannot time the market. Invest regularly, whether market up or down.

Myth #5. You can believe everything in the media and press. Question all financial news on television. All you read in the press. Be a skeptic, a doubter. You are the only guru. Think for yourself.

Myth #8. The specific fund you pick is your key to success. Wrong! Don’t let 10,000 funds confuse you. You only need a dozen funds. You can throw darts and pick out the best ones for you.

Myth #9. Investing in the stock market is not for everyone. Bad advice. Every American should be in the market. Stocks historically beat inflation, returning almost 11 percent (annually), providing growth. Get in now!

Myth #10. You gotta be rich to work with a financial adviser. Not so. Everybody needs a plan. You too. ‘Your job is to find a financial adviser or planner specializing in helping people like you.’ Get one.

Short, pithy, sound advice anyone can use, which Lewis follows up with these “truths” about how to successfully invest your money.

The 10 Truths of Investing

Truth #1. No one should know more about your money than you. Not even your financial adviser. They coach. You play quarterback.

Truth #3. It’s time in the market, not timing the market. Greed. Fear. Most investors buy at the top, sell at the bottom. Buy’n’hold.

Truth #4. Investing in the market is not for everyone. Long term, the market always goes up, better than most assets. But short-term, they do drop. Short-term needs? Use capital preservation strategies.

Truth #5. There’s a big difference between trading and investing. Many believe frequent trading will increase returns. Wrong. Studies show the more you trade the more you lose. Solution: Buy and hold.

Truth #6. People do lose money in the stock market. In the long-run, the market always goes up. Short-term, markets do drop. Panic and sell when it’s down, you lose. Buy quality, hold for long-haul.

Truth #7. A systematic plan will help you reach your goals. Only one in three Americans is saving enough to retire comfortably. A systematic plan can help you retire as one of the big winners.

Truth #8. Men and women often approach investing differently. Yes we both have the same goal of financial security. However, we do think different when it comes to money. Know those differences.

Truth #9. You can learn from active investors. All the great teachers tell us that experience is the best teacher. Get your own. And while on the learning trail, check in with experienced mentors.

Truth #10. Money alone cannot make you happy. Never could. Never will. “Life is a gift. No amount of money can buy you life, or health, or joy, or peace. Enjoy the treasures you have been given.”

After a review of the 10 Myths and 10 Truths, Lewis boils everything down to the essential, keep-it-simple 5 Laws of Investing, which do embrace the core of a successful investment strategy.

The Five Laws of Investing

Law #2. Diversify your risks. You can reduce your portfolio’s risks through asset allocation. Diversify across several sectors. Allocate your money across stocks, bonds and cash according to your needs.

Law #3. Compound interest--time is on your side. Einstein once said, “There is no greater power known to man than compounding interest.” Start early. Invest regularly. You will retire a millionaire.

Law #4. Invest in quality. Forget about chasing hot tips. Buy well-known leaders, the blue-chips, name-brands. Build your portfolio with solid core holdings of well-known growth funds like (TRBCX), (FLRFX), (HACAX), (FDGFX), (DSEFX), (DRTHX), (WOGSX), and (TORYX). Stick with the quality like this, and you’ll be able to retire comfortably.

Law #5. Bottom line -- the final responsibility is yours. This same message comes to us over and over, whether from Lewis or Buffett. Charles Schwab says: “Take all advice with a grain of salt. In the final analysis, if you’re going to be an independent investor, the decision is yours.” Take full responsibility. Trust yourself. Educate yourself. Get into action. After all, it is your money, your future.

One final ‘nice word’ for a new ‘old friend’

Most writers are pack rats. We collect lists and books, we save newspaper clippings, old magazines, newsletters, photos, insightful cartoons, and so much other useful and questionable stuff. We stick them into boxes, clip files, and stacks of just plain old stuff -- our attics for favorite memorabilia, you know, ‘old friends’ you can’t part with. Always there when you need them.

Lewis’ book, “The Million Dollar Car and $250,000 Pizza,” just became one of these new old friends, a ‘keeper’ you can trust and rely on. Get a copy for your library. Stick the myths, the truths and the laws on your refrigerator door, as a reminder amid all the noise and confusion of the day.

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